Why a Vacation Home Is the Ultimate Summer Upgrade

Summer is officially here and that means it’s the perfect time to start planning where you want to vacation and unwind this season. If you’re excited about getting away and having some fun in the sun, it might make sense to consider if owning your own vacation home is right for you.

An Ameriprise Financial survey sheds light on why people buy a second, or vacation, home (see below): 

• Vacation destination or a place to get away from the stresses of everyday life (81%) – Having a second home to use as a vacation spot can be a special place where you go to relax and take a break from your daily routines and stressors. It also means you won’t have to worry about finding somewhere to stay when you go there.

• Better weather (49%) – Buying in a place where there may be nicer weather can be a great escape, especially if it’s cold or rainy where you usually live. It lets you enjoy sunny days and warm temperatures, even when it’s not so nice back home.

• Rental income (41%) – You can rent it out to other people when you’re not using it, which can help you make some extra money.

• Primary residence in the future (33%) – You can eventually move into the home full-time during retirement. That means you can enjoy vacations there now and have a getaway ready for your future.

• Having a venue for gatherings with family and friends (25%) – It would be a special spot where you can have parties, regular family trips, and create fun memories.

Ways To Buy Your Vacation Home

And you don’t have to be wealthy to buy a vacation home. Bankrate shares two tips for how to make this dream more achievable for anyone who’s interested:

• Buy with loved ones or friends: If you’re okay with sharing the vacation home, you can go in on the purchase price together and pool your resources to make it more affordable.

• Put a savings plan in place: This will require patience and persistence but consider adding a vacation home savings plan to your budget and contributing to it monthly.

Finding Your Dream Spot with a Little Help from an Agent

If the idea of basking in the sun at your very own vacation home sounds appealing, you might want to start looking now. Summer’s when everyone’s trying to buy their slice of paradise, so it’s best to start early.

Your first move is to team up with a real estate agent. They know all the ins and outs of the area you want to be in, and which homes you should look at. Plus, they can give you the lowdown on everything you need to know about having a second home and how it can benefit you. The same article from Bankrate says:

“Buying real estate in a new area — or even one you’ve vacationed in for many years — requires expert guidance. That makes it a good idea to work with an experienced local lender who specializes in loans for vacation homes and a local real estate professional. Local lenders and Realtors will understand the required rules and specifics for the area you are buying, and a local Realtor will know what properties are available.”

Bottom Line

If the idea of owning your own vacation home appeals to you, connect with a real estate agent.

For the original article, visit Keeping Current Matters.

6 Questions First-Time Home Buyers Never Ask Themselves (but Really, Really Should)

There’s a certain point in the lifecycle of renting where you say to yourself: I just can’t do this anymore. Maybe it’s the upstairs neighbors, who relentlessly stomp across their apartment into the wee hours of the morning. Maybe it’s the numbingly dull white walls you’ve stared at year after year. Or perhaps it’s that bitter pill of knowledge that your hard-earned money is circling down the drain—en route to paying someone else’s mortgage.

No matter the reason, most of us eventually hit a breaking point with renting, and vow to become first-time home buyers.

But just because you want to buy a home doesn’t mean you should buy a home. Even if you’ve already evaluated your finances and told yourself, “I can swing a down payment,” there are some additional key questions to ask to determine whether you’re ready. Here, we unveil some oft-overlooked, soul-searching inquiries that you really should ask yourself before you make the biggest financial commitment of your life. Ready?

Find a real estate agent

A local real estate agent can answer questions, give guidance, and schedule home tours.

1. Have I recently experienced a loss?

If you’ve recently gone through a breakup, lost your job, or suffered any other kind of negative life event, you might feel like the answer is to start over. A reset can indeed do you a world of good, but taking on a mortgage probably won’t be the fresh new beginning you’re looking for.

“The most challenging time in someone’s life to buy a home is during a time of loss—and that can be many kinds of loss,” says Tyler Whitman, real estate agent with TripleMint in New York. “If it’s truly a high-stress moment, adding a move on top of that only makes things worse.”

Even if you think you’re in a good place, emotionally speaking, Whitman warns that stress might cause you to subconsciously make your housing decisions out of fear. It’s better to wait until you’re past a situation and can know you’re making the best choice for you.

2. If I get a new job, will I have to move?

The job market has changed drastically since the days when your parents bought a home, and you should know how that will affect you before you buy.

“Previous generations planned to get one job, keep it forever, and retire. Buying into a house because they were looking for a permanent living situation made a lot more sense,” says Chandler Crouch, broker for Chandler Crouch Realtors in Fort Worth, TX. “Now, job-hopping is prevalent.”

Changing jobs won’t be a big deal if you can keep—or raise—your salary, and your new gig is in your current city. But if there aren’t a ton of jobs in your industry in your area, you may find yourself having to relocate a year after you bought your home.

“It honestly isn’t a good idea to buy a house unless you plan on staying there for at least five years,” Crouch says. If you sell earlier, you may end up taking a loss on the deal.

3. Am I ready to write (a lot) of checks beyond the down payment?

Here’s the good news: Mortgage requirements have been loosening since the credit crunch, and you may very well be able to buy with less than 20% down. But the bad news is that won’t be the end of your upfront costs. Hire a mortgage broker and you could pay a 1% to 2% fee on the amount of the loan. A home inspection will cost you a few hundred. Your closing costs could add up to 7% of the total cost of the home. And then there’s the Murphy’s Law of it all: If something can go wrong, it probably will.

“If the air conditioner breaks a month after you close, or the dishwasher gives out, that’s now up to you,” Whitman says.

If you don’t have the funds to cover your closing costs and a separate emergency account for the inevitable “just moved in” headaches, it might be better to wait until you do.

And don’t forget about the additional costs of things like homeowner insurance and taxes. (Although you’ll likely be eligible for some pretty sweet tax deductions for being a homeowner, you’ll still have to pay property taxes—and that can mean a bit of sticker shock for long-term renters.)

4. Am I OK with owing the bank lots of money for a long time?

One of the biggest benefits of homeownership, of course, is the equity. Instead of handing all your hard-earned cash over to a landlord, you’re putting it back into your home—which you (hopefully) will sell for a profit down the line. But that equity doesn’t happen immediately. In fact, for many buyers, it takes time. Sometimes a long time.

Unless you pay for your house in cash, you’ll be on the hook for not only your monthly mortgage payment but the interest on the loan as well. Stretching out your payments over more years—as with a 30-year fixed-rate mortgage—can help reduce (and stabilize) your interest charges. But it can be hard to pay down your principal when you’re constantly trying to cover other costs.

It’s part of being a homeowner, and you need to decide if you’re good with it.

“Anyone considering buying needs to look at an amortization schedule to see exactly how much out of their monthly payment will be going toward paying off the house,” Crouch says.

5. Is buying truly cheaper in the long run?

This one depends quite a bit on where you live.

So do the math. Understand that when you’re buying, you’ll be taking on a big down payment and all those additional costs. On the other hand, you’ll want to take a look at your local rental market. If your rents are increasing steadily year over year, you might be shelling out more on temporary housing then you would on your own home each month. And you may find yourself with your savings too depleted to buy.

“On average landlords raise rent 7% per year,” Crouch says. “This is a compounding increase in expense.”

That could mean that buying, while a punch to the wallet now, will be more affordable in the long run. But if you live in a more stable rental market, it could be better to sock away some cash and wait a few more years to purchase a home. You can use our handy Rent vs. Buy Calculator to crunch the numbers and decide what’s right for you.

6. Am I secretly trying to talk myself into it?

Your co-workers don’t understand why you’re still renting. Your friends are all buying their first homes. You’ve been saving for years specifically so you can buy a house and become a key-carrying member of the Great American Dream. It may seem like you should just buy already, but try asking yourself: Do you really, truly want to?

Even if it might make sense on paper, Crouch still recommends asking yourself three questions before you finally decide:

• Am I trying to sell myself on the idea of buying a home?

• Am I trying too hard to justify it financially?

• Do my reasons to buy outnumber my reasons not to buy?

After all, buying a home is arguably the biggest financial (and, sometimes, emotional) commitment you’ll ever make. You need to be sure it’s right for you—no matter what anybody else says.

For the original article By Angela Colley on Aug 30, 2020, visit Realtor.com

Tips for Younger Homebuyers: How To Make Your Dream a Reality

If you’re a member of a younger generation, like Gen Z, you may be asking the question: will I ever be able to buy a home? And chances are, you’re worried that’s not going to be in the cards with inflation, rising home prices, mortgage rates, and more seemingly stacked against you.

While there’s no arguing this housing market is challenging for first-time homebuyers, it is still achievable, especially if you have professionals on your side.

Here are some helpful tips you may get from a pro.

1. Explore Your Options for a Down Payment

If a down payment is your #1 hurdle, you may have options to give your savings a boost. There are over 2,000 down payment assistance programs designed to make homeownership more achievable. And, that’s not the only place you may be able to get a helping hand. While it may not be an option for everyone, 49% of Gen Z homebuyers got money from loved ones that they used toward a down payment, according to LendingTree.

And chances are you won’t need to put 20% down (unless specified by your loan type or lender). So be sure to work with a trusted mortgage professional to explore your options, find out how much you’ll really need, and learn about any guidelines on getting a gift from loved ones.

2. Live with Loved Ones To Boost Your Savings

Another thing a number of Gen Z buyers are doing is ditching their rental and moving back in with friends or family. This can help cut down your housing costs so you can build your savings a whole lot faster. As Bankrate explains:

“. . . many have opted to stop renting and live with family in order to boost their savings. Thirty percent of Gen Z homebuyers move directly from their family member’s home to a home of their own, according to NAR.”

3. Cast a Broad Net for Your Search

When you’ve saved up enough, here’s how a pro will help you approach your search. Since the supply of homes for sale is still low and affordability is tight, they’ll give you strategies and avenues you may not have considered to open up your pool of options.

For example, it’s usually more affordable if you consider a rural or suburban area versus an urban one. So, while the city may be livelier and more energetic, the cost of living may be reason enough to look at something further out. And if you consider smaller homes and condos or townhouses, you’ll give yourself even more ways to break into the market. As Colby Stout, Research Analyst at Bright MLS, explains:

“Being flexible on the types of home (e.g., a condo or townhome versus a single-family home) and exploring more affordable neighborhoods is important for first-time buyers.”

4. Take a Close Look at Your Wants and Needs

And lastly, an agent can help you really think about your must-have’s and nice-to-have’s. Remember, your first home doesn’t have to be your forever home. You just need to get your foot in the door to start building equity. If you want to buy, you may find making some compromises is worth it. As Chase says:

“An open-minded approach to house-hunting may be one way for Gen Z homebuyers to maintain some edge. This could mean buying in areas that are less expensive. Differentiating needs vs. wants may help in this area as well.”

An agent will help you prioritize your list of home features and find houses that can deliver on the top ones. And they’ll be able to explain how equity can benefit you in the long run and make it possible to move into that dream home down the line.

Bottom Line

Real estate professionals have expertise on what’s working for other buyers like you. Lean on them for tips and advice on ways you can get ready to buy. As Directors Mortgage says, with that support you can make it happen:

“The path to homeownership may not be a straightforward one for Gen Z, but it’s undoubtedly within reach. By adopting the right strategies, like exploring down payment assistance programs and sharing living costs with relatives, you can bring your dream of owning a home closer to reality.”

For the original article, visit Keeping Current Matters.

The Perks of Buying over Renting

Thinking about buying a home? While today’s mortgage rates might seem a bit intimidating, here are two solid reasons why, if you’re ready and able, it could still be a smart move to get your own place.

1. Home Values Typically Go Up Over Time

There’s been some confusion over the past year or so about which way home prices are headed. Make no mistake, nationally they’re still going up. In fact, over the long-term, home prices almost always go up (see graph below):

Using data from the Federal Reserve (the Fed), you can see the overall trend is home prices have climbed steadily for the past 60 years. There was an exception during the 2008 housing crash when prices didn’t follow the normal pattern, but generally, home values kept rising.

This is a big reason why buying a home can be better than renting. As prices go up and you pay down your mortgage, you build equity. Over time, this growing equity can really increase your net worth. The Urban Institute says:

“Homeownership is critical for wealth building and financial stability.”

2. Rent Keeps Rising in the Long Run

Here’s another reason you may want to think about buying a home instead of renting – rent just keeps going up over the years. Sure, it might be cheaper to rent right now in some areas, but every time you renew your lease or sign a new one, you’re likely to feel the squeeze of your rent getting higher. According to data from iProperty Management, rent has been going up pretty consistently for the last 60 years, too (see graph below):

So how do you escape the cycle of rising rents? Buying a home with a fixed-rate mortgage helps you stabilize your housing costs and say goodbye to those annoying rent increases. That kind of stability is a big deal.

Your housing payments are like an investment, and you’ve got a decision to make. Do you want to invest in yourself or keep paying your landlord?

When you own your home, you’re investing in your own future. And even when renting is cheaper, that money you pay every month is gone for good.

As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), says:

“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”

Bottom Line

If you're tired of your rent going up and want to explore the many benefits of homeownership, talk to a local real estate agent to explore your options.

For the original article visit Keeping Current Matters.

What Is Going on with Mortgage Rates?

You may have heard mortgage rates are going to stay a bit higher for longer than originally expected. And if you’re wondering why, the answer lies in the latest economic data. Here’s a quick overview of what’s happening with mortgage rates and what experts say is ahead.

Economic Factors That Impact Mortgage Rates

When it comes to mortgage rates, things like the job market, the pace of inflation, consumer spending, geopolitical uncertainty, and more all have an impact. Another factor at play is the Federal Reserve (the Fed) and its decisions on monetary policy. And that’s what you may be hearing a lot about right now. Here’s why.

The Fed decided to start raising the Federal Funds Rate to try to slow down the economy (and inflation) in early 2022. That rate impacts how much it costs banks to borrow money from each other. It doesn’t determine mortgage rates, but mortgage rates do respond when this happens. And that’s when mortgage rates started to really climb.

And while there’s been a ton of headway seeing inflation come down since then, it still isn’t back to where the Fed wants it to be (2%). The graph below shows inflation since the spike in early 2022, and where we are now compared to their target rate:

As the graph shows, we’re much closer to their goal of 2% inflation than we were in 2022 – but we’re not there yet. It’s even inched up a hair over the last 3 months – and that’s having an impact on the Fed’s plans. As Sam Khater, Chief Economist at Freddie Mac, explains:

“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates.”

Basically, long story short, inflation and its impact on the broader economy are going to be key moving forward. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“It’s the longer-term outlook for economic growth and inflation that have the greatest bearing on the level and direction of mortgage rates. Inflation, inflation, inflation — that’s really the hub on the wheel.”

When Will Mortgage Rates Come Down?

Based on current market data, experts think inflation will be more under control and we still may see the Fed lower the Federal Funds Rate this year. It’ll just be later than originally expected. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), said in response to the Federal Open Market Committee (FOMC) decision yesterday:

“The FOMC did not change the federal funds target at its May meeting, as incoming data regarding the strength of the economy and stubbornly high inflation have resulted in a shift in the timing of a first rate cut. We expect mortgage rates to drop later this year, but not as far or as fast as we previously had predicted.”

In the simplest sense, what this says is that mortgage rates should still come down later this year. But timing can shift as new employment and economic data come in, geopolitical uncertainty remains, and more. This is one of the reasons it’s usually not a good strategy to try to time the market. An article in Bankrate gives buyers this advice:

“ . . . trying to time the market is generally a bad idea. If buying a house is the right move for you now, don’t stress about trends or economic outlooks.”

Bottom Line

If you have questions about what’s happening in the housing market and what that means for you, connect with a trusted real estate professional.

For the original article, visit Keeping Current Matters.

Equity Can Make Your Move Possible When Affordability Is Tight

Some Highlights

• Did you know the equity you have in your current house can help make your move possible?

• Once you sell, you can use it for a larger down payment on your next home, so you’re borrowing less. Or, you may even have enough to be an all-cash buyer. 

• The typical homeowner has $298,000 in equity. If you want to find out how much you have, connect with a local real estate agent for a Professional Equity Assessment Report.

For the original article visit Keeping Current Matters.

Is a Multi-Generational Home Right for You?

Ever thought about living in the same house with your grandparents, parents, or other loved ones? You’re not alone. A lot of people are choosing to buy multi-generational homes where everyone can live together. Let’s check out why they think it’s a good idea to see if it might be a good fit for you, too.

Why People Are Choosing Multi-Generational Living

According to the National Association of Realtors (NAR), here are just a few key reasons buyers opted for multi-generational homes over the past year (see graph below):

 Two of the top reasons had to do with aging parents. 27% of buyers chose multi-generational homes so they could take care of their parents more easily. And 19% did it to spend more time with them. A lot of older adults want to age in place, and living in a home with loved ones can help them do just that. If your parents are hoping to do the same, but need a bit of help, a multi-generational home may be worth considering.

But buying a multi-generational home isn’t just about being close or taking care of the people you love—it can save you money, too. 22% of buyers say they picked a multi-generational home to cut down on costs, and 11% needed a bigger house multiple incomes could afford together.

Sharing costs like the mortgage and utilities can make owning a home more affordable. This is especially helpful for first-time homebuyers who might find it challenging to buy a place on their own in today’s market.

As Axios explains:

“Financial concerns and caregiving needs are two of the major reasons people live with their parents (and parents’ parents).”

How an Agent Is Key in Finding the Right Home for You

Looking for the perfect multi-generational home is a bit trickier than finding a regular house. You’ve got more people, which means more opinions and needs to think about. It’s kind of like putting together a puzzle where all the pieces need to fit perfectly.

If you’re into the idea of living with loved ones and want all the benefits that come with it, team up with a local real estate agent who can help you out.

Bottom Line

Whether you're looking to save money or want to take care of your loved ones, buying a multi-generational home might be a good idea for you. If you want to find out more, talk to a local real estate agent.

For the original article visit Keeping Current Matters.

Single Women Are Embracing Homeownership

In today’s housing market, more and more single women are becoming homeowners. According to data from the National Association of Realtors (NAR), 19% of all homebuyers are single women, while only 10% are single men.

If you’re a single woman trying to buy your first home, this should be encouraging. It means other people are making their dreams a reality – so you can too.

Why Homeownership Matters to So Many Women

For many single women, buying a home isn’t just about having a place to live—it’s also a smart way to invest for the future. Homes usually increase in value over time, so they’re a great way to build equity and overall net worth. Ksenia Potapov, Economist at First American, says:

“. . . single women are increasingly pursuing homeownership and reaping its wealth creation benefits.”

The financial security and independence homeownership provides can be life-changing. And when you factor in the personal motivations behind buying a home, that impact becomes even clearer.

The same report from NAR shares the top reasons single women are buying a home right now, and the reality is, they’re not all financial (see chart below):

If any of these reasons resonate with you, maybe it’s time for you to buy too.

Work with a Trusted Real Estate Agent

If you’re a single woman looking to buy a home, it is possible, even in today’s housing market. You’ll just want to be sure you have a great real estate agent by your side.

Talk about what your goals are and why homeownership is so important to you. That way your agent can keep what’s critical for you up front as they guide you through the buying process. They’ll help you find the right home for your needs and advocate for you during negotiations. Together, you can make your dream of homeownership a reality.

Bottom Line

Homeownership is life-changing no matter who you are. Connect with a local real estate agent to talk about your goals in the housing market.

For the original article visit Keeping Current Matters.

On the House: How Early Should I Begin Searching for a Home?

Q:How early should I begin shopping for a home if I hope to buy one this year?

There’s no hard-and-fast rule on how early to start looking for a home. But I suggest that first-time homebuyers give themselves at least six months.

Even with the rising number of more affordable homes going up for sale, it’s challenging to find a home you want in a location where you would like to live—and then beat out all of the competition for it.

Many buyers traditionally start home shopping around now as the spring housing market kicks off. Some will be lucky and have their first offer accepted, while others may be looking for years. How early you begin your search depends on your deadline to move, the number of buyers vying for homes in your area, and your price range.

It took the typical buyer 10 weeks to find a home, according to the most recent data from the National Association of Realtors®.

It might take you longer as there’s a lot of competition for move-in ready, affordable homes in a great school district. However, if you’re open to purchasing a fixer-upper, a home in a less popular location, or even a luxury home, your search might be considerably shorter. It’s really market-specific.

When my spouse and I purchased our first house, a starter home in the New York City suburbs, it took about nine months before we closed. This was in late 2021, though, during the COVID-19-juiced market. And we were holding out for that reasonably priced starter home with curb appeal.

If you’re thinking about starting your home search soon, there are a few things you should consider doing first.

1. Figure out what you can afford

The first thing first-time buyers should do is figure out how much home they can afford. There’s no point in falling in love with a home you can’t comfortably pay for. You also don’t want to get in over your head financially. (Repeat after me: I will not allow myself to be house poor.)

That’s why it’s helpful to run your numbers to help you to establish a budget. Don’t forget to factor in property taxes, home insurance, and private mortgage insurance (if you don’t put 20% down) costs as well.

Note: Property taxes can vary greatly from home to home and town to town. They can also rise steeply in some municipalities after you have work done on the property.

You can find out here how much home you can afford.

This might also be an opportune time to clean up your credit and pay down debt. Lenders typically grant larger loans to those with higher credit scores and less debt. Borrowers with pristine credit can also often score lower mortgage rates and fees on loans.

2. Get pre-approved for a mortgage

In the competitive spring market, you may need to act quickly if you see a great home. That’s why you should get a mortgage pre-approval letter early in your homebuying journey.

Most sellers aren’t going to want to take a chance on buyers who can’t prove they will be able to secure financing, especially if other offers come in. A pre-approval letter tells sellers that you’re serious—and are likely to be able to get a loan up to a specified amount.

3. Familiarize yourself with the local market

The more you know about the local market, the less time you’ll waste when you start putting in offers.

It helps to know how often homes in your price range are going up for sale and if they are located in neighborhoods where you would like to live. You’ll also want to know how quickly homes are selling in these areas, so you know if you need to make an offer on the spot or have some time to think it over.

Perhaps most importantly for first-time buyers, you should find out how much similar homes sold for at closing. Focus your research on homes in your price range in the places where you would like to live. If you want only a move-in ready home in a certain school district, look at those comps and not for fixer-uppers.

You’ll want to find out if these homes are selling for above the list price, and if so, by how much. Or maybe they’re not going for the asking price. This will help you to figure out the offers you should be making.

Try to be thorough in your research. What are the property taxes in this area? Is this area within a reasonable commute to your job? If you have children, are there other families in the neighborhood? Is the community close to parks and restaurants? You want to make sure this is a place where you’ll be happy.

4. Know your priorities

Finally, figure out what you have to have in a home—and what you can live without.

Unless you’re a multimillionaire, most first-time buyers will likely have to make some hard compromises. Knowing what you can live without or choosing a not-quite-ideal location could open up more potential homes. And if you’re looking in less competitive markets, you might be able to purchase a home faster.

For the original article by Clare Trapasso visit Realtor.com

Is It Easier To Find a Home To Buy Now?

One of the biggest hurdles buyers have faced over the past few years has been a lack of homes available for sale. But that’s starting to change.

The graph below uses the latest data from Realtor.com to show there are more homes on the market in 2024 than there have been in any of the past several years (2021-2023):

Does That Mean Finding a Home Is Easier?

The answer is yes, and no. As an article from Realtor.com says:

“There were nearly 15% more homes for sale in February than a year earlier . . . That alone could jolt the housing market a bit if more “For Sale” signs continue to appear. However, the nation is still suffering from a housing shortage even with all of that new inventory.”

Context is important. On the one hand, inventory is up over the past few years. That means you’ll likely have more options to choose from as you search for your next home.

But, at the same time, the graph above also shows there are still significantly fewer homes for sale than there would usually be in a more normal, pre-pandemic market. And that deficit isn’t going to be reversed overnight.

What Does This Mean for You?

You might find a few more choices now than in recent years, but you shouldn’t expect a ton of options.

To help you explore the growing list of choices you have now, team up with a local real estate agent you trust. They can really help you understand the inventory situation where you want to buy. That’s because real estate is local. An experienced agent can share some smart tips they’ve used to help other buyers in your area deal with ongoing low housing supply.

Bottom Line

If you’re thinking about buying a home, team up with a local real estate agent. That way, you’ll be up to date on everything that could affect your move, including how many homes are for sale right now.

For the original article, visit Keeping Current Matters.